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My last piece onJumblatt’s defectionfrom March 14 somewhat optimistically predicted a short delay in the government formation process. Since then things have gone really sour again. Here is an analysis of the obstacles and their implications.

Since the June parliamentary elections, the March 14 coalition has failed to use its victory to dictate the terms of a new government. The negotiations have faltered on March 8’s demand for a blocking third of cabinet posts. More deep-seated disagreements over Hizbollah’s weapons and Lebanon’s regional alliances add to the complications.

In July, the two camps appeared to have agreed on a compromise solution granting 15 posts to March 14 (short of a majority) and ten to March 8 (short of veto power), with President Michel Suleiman choosing five and thus having a decisive say. However, in recent weeks disagreement over the exact allocation of ministries has taken the process back to the start, and raised the tone of personal bickering and media slander to its shrillest level since 2008.

Christian opposition leader Michel Aoun has been at the centre of the latest crisis in government formation. On August 16, Aoun demanded that his Reform and Change bloc be allotted the Interior Ministry and that his son-in-law, caretaker minister Gebran Bassil, keep the Telecommunications Ministry for another term.

This uncompromising stance has prompted March 14 to criticise Hizbollah’s inability or unwillingness to mediate. Saad al-Hariri has made it clear that he is unlikely to accept Aoun’s conditions, which means that for now negotiations are deadlocked. Unless there is truth to al-Akhbar’s story from yesterday about a Saudi-Syrian push to kickstart talks, the most likely scenario now seems to be that the deliberations over a new cabinet will be postponed until after the end of Ramadan in late September.

As ever, domestic political wrangling in Lebanon reflects regional power struggles. Courtesy of US rapprochement, Syria has moved decisively out of the cold, and returned to its favoured position as the necessary diplomatic bridge between Iran and the West. Damascus’ relations with Saudi Arabia have yet to improve, as a scheduled meeting between King Abdallah and President Bashar al-Assad in Damascus in late July was cancelled. Syria’s relations with Egypt, another key ally of Hariri, have been deep-frozen because of Egyptian allegations that Hizbollah members have been spying and plotting bomb attacks in Egypt. The first trial took place in Cairo yesterday, and the fallout is surely more bad blood between Egypt and Hizbollah.

On the other front, Assad has moved to shore up relations with embattled Iranian President Mahmoud Ahmadi-Nejad during a state visit on August 19. Here, Assad emphasised the necessity of resolute defence against Western influence in the region.

Syria’s strengthened position indirectly provoked the latest breakdown in government negotiations, when Druze leader Walid Jumblatt declared on August 2 that he would leave March 14. As I argued in my earlier piece, his aim was to hedge against Syria’s rising influence, and his defection has been widely seen as a victory for Damascus.

This is becauseJumblatt, who is known for his ever-changing allegiances, has, since 2005, formed one-third of a strong coalition of Christian, Sunni and Druze opposition to Syrian influence in Lebanon, which has dominated Lebanese politics. Although it does not sound the death knell for March 14, Jumblatt’s defection still marks a tide change in Lebanese politics and opens up opportunities for new alliances in the coming months:

First, although Jumblatt has hardly embraced the Syrians, they are in a much stronger position in Lebanon. Hariri, now left with distinctly anti-Syrian Christian allies Amin Gemayel and Samir Geagea, may feel compelled to move towards a more conciliatory position, lest he alienate his Sunni constituency.

Second, while taking no concrete action, Jumblatt has spoken with members of both March 8 and March 14, and is locating himself in a central position between the two without joining either. He has signalled that he will be associating himself with Suleiman, adding to the possibility of a strong conciliatory bloc emerging — which would mediate between the two existing groups — and may also include Parliamentary Speaker Nabih Berri.

If such a strong third bloc does materialise, Aoun may also be tempted to reconsider his alliance with Hizbollah, which has not landed him the presidency or gained him much actual influence.

The biggest decisions to be taken are surely Saad Hariri’s. As prime minister-designate, and with Suleiman preferring a neutral role, the onus is squarely on Hariri to form a government, but he is left with some hard choices following Jumblatt’s defection. He has several options:

He could of course accommodate Aoun’s demands, which would make him look defeated by Aoun and Hizbollah, but would leave March 8 with no legitimate reasons to oppose a quick government formation.

Alternatively, he could carry through a planned visit to Damascus, which has been postponed. Effectively this would mean giving up his resistance to Syrian influence on the government formation process, particularly as the Syrians have signalled that they want Hariri to visit Damascus before the cabinet is finalised.

Finally, he could continue to oppose Syrian pressure. By not going to Damascus so far, Hariri has been signalling that he intends to resist the Syrian endeavour to re-impose some sort of hegemony over Lebanon. US discouragement of such a visit and Hariri’s reluctance to do business with a regime he believes to be responsible for his father’s assassination are also playing a part. As Michael Young suggested recently, they may have also contributed to the cancellation of the scheduled meeting in Damascus between Abdallah and Assad.

In conclusion, although March 14 would like to see a new government formed, Hariri appears ready to hold out for regional events which would tip the balance in his favour. This could either be US President Barack Obama’s expected Middle East peace initiative next month. While Obama’s peace plan might deflect attention from Lebanon, it could also prompt Syria to work with Saudi Arabia over Palestinian reconciliation and accept a new Lebanese government in return for inclusion in the peace process.

Alternatively, Hariri could be waiting for the Special Tribunal for Lebanon to issue an indictment naming Hizbollah as a participant in the assassination of Hariri’s father, as predicted by the German magazine, Der Spiegel, earlier this year. This would leave Syria weakened and more eager to reach an agreement.

Whatever he does, Hariri holds the keys to further progress. If he chooses to accommodate Aoun’s demand for a key ministry, he may be able to form a new government and hence avoid the more serious choice between openly accepting or rejecting Syrian hegemony. If not, deadlock could well continue at least until the end of Ramadan.